The left's nuclear problem

Why it matters now: The nuclear power industry, which provides the U.S. nearly two-thirds of its carbon-free electricity, is reaching an inflection point. Several power plants are shutting down under economic duress, which is putting pressure on Congress and state legislatures to keep them open, while a new generation of advanced nuclear technologies need government backing to get off the ground.

Some Democratic politicians and prominent scientists have come out to back nuclear in recent years because of climate change, but most of the biggest environmental groups and influential leaders remain opposed. In interview after interview at a United Nations climate conference in Bonn, Germany, I noticed a trend: Politicians would cite the many challenges facing nuclear power, such as safety, how to store radioactive waste and the economics, as reasons their positions didn't matter. Those more inclined to support the fuel would cite the challenges as hurdles to overcome. Three examples:

Tom Steyer, the billionaire environmental activist: "Obviously, nuclear does not create greenhouse gases. It creates other problems ... Nobody has any ability to create nuclear power at any kind of competitive price point, plus all of the existing nuclear plants have disposal and safety issues."

Michael Bloomberg, the billionaire former mayor of New York City, is opting not to put his money toward state initiatives trying to keep open struggling reactors. Instead, he's funneling his money — $116 million over the last month — to close coal plants in the U.S. and Europe. "Nuclear power is not killing people from air pollution and climate change the way coal power is," said Antha Williams, the head of the environment program at Bloomberg Philanthropies. "So he doesn't oppose nuclear."

Democratic Gov. Kate Brown of Oregon, whose state is one of more than a dozen that effectively ban nuclear power, says she wants to see data ensuring safe storage of fuel waste. Brown described Oregon-based NuScale, a startup building small advanced reactor technologies, as "innovative," but she declined to comment on state legislation exempting the technology from the ban. "I would just say it's not my focus at this point in time."

Many of America's largest environmental groups, which have influence over liberal politicians, are doubling down on their opposition to nuclear power. They argue plummeting prices of wind and solar make nuclear power unnecessary.

Another reason: they'd lose donations, according to James Hansen, a climate scientist at Columbia University, and his colleague Steve Kirsch, a California-based entrepreneur and philanthropist. At a meeting in 2014 between Kirsch and Frances Beinecke, who at the time led the Natural Resources Defense Council, Beinecke said one of the reasons the group couldn't back nuclear power is because it would lose donations.

"The lunch did in fact occur and there was no movement," Kirsch said by email last week. A spokesman for NRDC declined to comment. Beinecke, who retired from NRDC later that year, didn't respond to requests for comment. NRDC's position on nuclear power resembles that of many others on the left: It would only support it if all of the industry's challenges are "properly mitigated."

Democratic senators who traveled to the Bonn conference indicated an increased albeit cautious openness to nuclear power, but this rhetoric was not matched by any sense of urgency to press for action in Congress or otherwise.

Sen. Sheldon Whitehouse of Rhode Island said there's bipartisan support to pass a pair of measures boosting advanced nuclear technologies and helping keep open existing reactors facing economic challenges. On the latter point, he was talking about a bill he authored that puts a price on carbon emissions. That would help nuclear power because it would monetize its carbon-free attribute, but Republicans, most of whom don't acknowledge climate change is a problem but do back nuclear power, don't support that bill.

"The rhetoric seldom goes further into doing anything that could actually support (or end) nuclear power in this country," said Andrew Holland, an energy expert at the American Security Project, a think tank. "What we're left with is a sort of stasis, where policies don't change, and America's nuclear power capacity slowly erodes."

Meanwhile, smaller policies seem poised to pass. The tax overhaul bill the House just approved extends a production tax credit for nuclear energy, which industry executives say is critical to both existing reactors and advanced technologies still in planning phases.

Quote"It is shifting in a sensible direction, but slower than it needs to," Hansen said.

The swamp’s tug-o-war over America’s ethanol mandate

Illustration: Rebecca Zisser / Axios

A biofuels standard Congress passed more than a decade ago in the name of rural development, energy security and climate change has devolved into an arcane fight over market share that has nothing to do with those initial three goals.

Why it matters: The law — called the renewable fuel standard that requires refineries to blend biofuels into gasoline — is a textbook example of how regulations create winners, losers and unintended consequences.

The level of attention President Trump has given to this policy is remarkable given the chaos emanating from him in the West Wing. It reflects the important competing interests of corn farmers in Iowa and refiners in Pennsylvania.

“He’s taking a very personal involvement in it,” Republican Sen. Chuck Grassley of Iowa, the most influential congressional backer of the policy, told me in an interview last week. “When you have the president himself, you don’t need to worry about the chaotic conditions at the White House.”

Trump and his top advisers have been meeting in recent months with companies that refine oil and those that produce corn ethanol, as well as their allies in Congress to find elusive middle ground over the mandate’s compliance costs.

Gritty details:

Some refineries are facing high costs to comply because they don’t have the capacity to blend ethanol. So they have to buy credits called Renewable Identification Numbers (RINs) from others that do have blending capacity, including other oil companies.

These refineries, which include Northeast-based firms PBF Energy and bankrupt Philadelphia Energy Solutions, want the mandate relaxed so their costs go down.

One proposal by Republican Sen. Ted Cruz of Texas would cap the amount of RINs companies can trade.

Ethanol companies want the policy expanded to allow more blending, which they argue would lower compliance costs.

“The last six months have been about RINs and most people have no idea what that is and why we are talking about RINs,” said Emily Skor, CEO of Growth Energy, a coalition of ethanol companies.

Grassley tweeted to Trump late last week: “I want to shake what u might be planning abt a RINS cap for a short period. It will be CATASTROPHIC to ethanol.”

That prompted responses on Twitter like “How many of you even know what RIN is ? Without goggle ? [sic] LOL” and “What is RINS cap?”

This arcane fight is a classic battle for market share. Corn ethanol’s share of the fuel market is growing and testing some refiners’ ability to comply with the mandate. Nearly every gallon of gasoline now has 10% ethanol blended into it.

When Congress created the mandate in 2005 and expanded it in 2007, lawmakers predicted increasing gasoline demand and decreasing oil production. On both fronts, the opposite occurred: Oil production skyrocketed and demand for gasoline leveled off. Companies are fighting for their piece of a stagnant transportation fuel mix.

“It is now a battle about winners and losers,” PBF Energy CEO Tom Nimbley told me at an energy conference in Houston earlier this month. “It’s a fight over money and market share.”

Other oil companies, ranging from giants Shell and BP to independent refiners like Andeavor, are better situated to comply with the mandate. That's either because they've had a long-standing ability to blend ethanol with gasoline or because they changed their strategy over the last decade to do so.

“Some people do long-range planning better than others,” said Jack Gerard, president of the American Petroleum Institute, whose members represent all parts of the oil and refining sectors. “That’s what we call free-market competition.”

Nimbley said his company hasn’t been able to change its operations to blend ethanol due to infrastructure and geographical constraints.

“It’s an expedient argument to say ‘you just don’t have the right business model,’ ” Nimbley said. “That’s just not factual. That’s just the hyperbole that gets into this situation.”

While refineries and ethanol companies battle it out over the mandate’s compliance costs, the third goal Congress had in mind of combating climate change is lost in the noise. Lawmakers envisioned biofuels made from plant material that's cleaner than corn ethanol to develop. That hasn't happened.

For context:

The law had envisioned 5.5 billion gallons of biofuels made from cellulosic material like switchgrass to be produced last year.

Instead, just 13 million gallons of this liquid type of biofuels came online in 2017, according to Michael McAdams, head of the Advanced Biofuels Association. This is due to several unforeseen factors, including the 2008 economic recession and regulatory uncertainty during the Obama administration.

“We had high expectations,” said Henry Waxman, a former California Democratic congressman who helped pass the 2007 bill. “But we are very much disappointed by the way this law has worked out.”

What’s next: More tug-o-war. Grassley and other Republicans representing corn-producing states sent a letter to Trump Thursday requesting another meeting to talk about Cruz’s proposal to cap RINs. Lawmakers are also working on legislation. That remains a long-shot because ethanol policy divides the Republican Party controlling Congress.

U.K. and E.U. agree to Brexit transition terms

Secretary of State for Exiting the European Union David Davis and the European Union's chief Brexit negotiator Michel Barnier held a joint press conference today. Photo: Dursun Aydemir / Anadolu Agency / Getty Images

Negotiators for the United Kingdom and European Union have reached a deal on key terms for the Brexit transition period, which will run from March 29, 2019, the official date of Brexit, through December 31, 2020, per The Guardian. The agreement saw the U.K. make some notable concessions on contentious issues.

The details:

The U.K. will remain a part of the E.U.'s single market and customs union throughout the transition but lose any decision-making capability for the bodies. It can also sign trade deals to go into effect in 2021.

The agreement contains a "backstop" that would put a hard border in the Irish Sea and leave Northern Ireland under E.U. regulatory control if no other solution can be reached.

The status of E.U. citizens who move to the U.K. during the transition won't change, despite Prime Minister Theresa May's wish to limit those rights after Brexit.